Accounting and accountability in charitable SMEs

The lack of existing empirical research into charitable small to medium sized enterprises (SMEs) represents a crucial gap in our knowledge of third sector accounting and accountability. We therefore seek to investigate the role played by accounting in small charities, and the relevance of current regulations to such organizations. We use fieldwork methods to gather new empirical evidence on accounting in small charities, focusing on the need for accountability, social accounting and accountability and performance measurement. Accountability is thought to be important in this sector;
however, there is sometimes a lack of awareness of what is meant by ‘social accounting’. Successful performance is typically categorized as maintaining the operation as a going concern. The majority of respondents feel that the funders dictate what must happen. Small charities are typically ignorant of the advantages to be gained through improved accounting, which could include access to greater funds. The paper provides new empirical insights into practice and perceptions in the third sector.